The UK retail landscape is changing rapidly. Consumer spending is decreasing, competition is increasing between businesses, and people are turning to e-commerce at an unprecedented rate. This has resulted in an increasingly complex retail environment for online retailers whilst complicating logistics, pricing and overarching strategy for e-commerce operators. Here are three key e-commerce trends to be across in 2018.
The rise of the e-commerce shopper
In 2016, the United Kingdom had the third largest e-commerce industry in the world, with a value of GBP 533 billion. The trend towards online shopping is strong; 75% of Britons are forecast to regularly shop online by 2021.
For e-commerce businesses, meeting this significant growth head on comes with a unique set of challenges. Businesses that are managing inventory well are likely to enjoy a substantial competitive edge; top service and prompt delivery are key selling points for online retailers, so stockouts are not to be tolerated. Businesses are likely to need to move away from traditional stock taking procedures and adopt advanced cloud-based inventory tracking. A stock taking procedure that involves counting stock once a quarter may work well in traditional retail, but it can be a significant disadvantage in the fast-paced online retail sector.
Whilst growing in number, UK consumers are also interacting with retailers in unprecedented ways. This has led to significant innovation such as the use of artificial intelligence and even virtual reality. These technologies are being used to change the consumer experience for the better. For example, someone buying a pair of spectacles online can see how different pairs would look simply by uploading an image of themselves online. Homeowners can virtually decorate their living room, experimenting with wall colours and furniture by uploading an image and clicking a button. Many online businesses are using chat bots to attend to customer queries, providing a higher degree of responsiveness than ever before. Customers are wanting things instantly whilst simultaneously shopping from the comfort of their own home.
Consumers are also changing how they purchase. Increasingly, mobile phones are being used to purchase and research on the go. This has opened up a raft of possibilities, particularly for shoppers in rural areas who were previously limited by physical stores. From a marketing perspective, businesses have to ensure that their websites and product information are not just suitable for traditional desktop computers, but are also compatible on mobile phones.
Simultaneously, e-commerce businesses have to be able to ship out to any location across the United Kingdom as they are now accessible by even the most remote individual. This provides a unique challenge in its own right, yet one that can provide a tremendous reward if done effectively.
United Kingdom Economy
Despite consumer demands, consumer confidence in the UK is at its lowest since the post global financial crisis recovery. Due to fears of a slumping British economy, many consumers are cutting back on luxuries and prioritising necessities instead. For e-commerce companies, the good news is that customers are increasingly turning to online retailers in an attempt to buy cost-effectively without paying for the overheads of a physical retail network.
UK shoppers are also placing an increasingly high importance on the reliability and speed of e-commerce shopping. For businesses, this means a single order lost in transit, or one that takes too long to arrive, can discourage a customer from purchasing again. This highlights the importance of e-commerce businesses moving away from periodic inventory and traditional stock taking procedures and moving towards advanced inventory management to ensure they can process and ship orders reliably and efficiently.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.